China approves Ford, Mazda, Changan to split JV in two: Ford CEO
CHONGQING, China (Reuters) - Ford Motor (F.N) and Mazda Motor Corp (7261.T) and their local Chinese partner Chongqing Changan Automotive Co have received approval from China's central government to split their three-way, manufacturing and sales joint venture into two, Ford's chief executive said on Monday.
"We're very pleased with the restructuring and the way it's going. We have approval from (China's central government), and we're proceeding through the regulatory process ... so we're very, very appreciative and encouraged," Chief Executive Alan Mulally told reporters in the southwestern Chinese city of Chongqing.
Ford and Mazda share two major manufacturing bases in Chongqing and the eastern city of Nanjing. Under the plan, the tie-up will be carved into two joint ventures, Changan Ford Mazda Automobile said in a statement on Monday.
The two ventures are temporarily called Changan Ford Automobile and Changan Mazda Automobile. The Chongqing operations will be owned and operated by Ford and Changan, and the Nanjing base by Mazda and Changan.
Naoto Oikawa, a Mazda spokesman in Shanghai, said the Japanese automaker was planning a formal announcement on the split, but had nothing to say on Monday. "We're likely to make a formal announcement shortly," Oikawa said, without elaborating.
Executives close to the three-way joint venture said the move is partly driven by Ford's decision in 2008 to raise money by reducing its controlling stake in Mazda to 13 percent from one third. The U.S. automaker later further reduced its stake in Mazda, and its stake currently stands at less than 3 percent.
The two companies now feel less need to coordinate their strategy in China with each other and are seeking more operational freedom to boost their presence individually in the country, which in 2009 surpassed the United States as the world's largest auto market, the knowledgeable individuals said.
(Reporting by Deepa Seetharaman; Writing by Norihiko Shirouzu; Editing by Ian Geoghegan)